Anaheim City Council Passes Strict Short-Term Rental Ban

Residents protesting short term rentals, which have fed off a tourist economy and home sharing sites like Airbnb, march in front of Anaheim City Hall.

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After a marathon special meeting that included four-and-a-half hours of public comment, the Anaheim City Council Wednesday night passed a ban on short-term rental homes, which have mushroomed in the areas around Disneyland in recent years and pitted neighbor against neighbor.

The council action, which passed on a 3-2 vote, gives the city’s 363 permitted short-term rental operators 18 months to phase out their businesses.

“There’s a difference between a home and a house. A short-term rental is no longer a home,” said Mayor Tom Tait, who along with councilmen Jordan Brandman and James Vanderbilt, voted for the ban. “[and] it’s homes that make up the fabric of a neighborhood.”

Councilwomen Kris Murray and Lucille Kring voted against the ban. Murray was in support of a ban, but voted against the ordinance because she believed operators should have more time to phase out their businesses.

The vote drew both tears and applause from stunned onlookers, the end of an emotional and contentious meeting where members of the audience frequently jeered and heckled speakers from the other side.

The public comment period was a study in contrasts — drawing testimony from more than 150 residents and operators who have clashed for years over the growing number of rentals, fueled by websites like Airbnb and VRBO, that have drawn tourists and out-of-town vacationers to residential neighborhoods.

Short-term rentals have become popular in recent years as an adventurous and intimate alternative to hotel stays, and have exploded in destinations like Anaheim where Disneyland has ensured a steady and year-round influx of vacationers.

Operators, and some of their supportive neighbors, told stories about renovating once run-down homes that now beautify neighborhoods; families with children with disabilities or severe food allergies finally being able to find an accommodating place to vacation; and new economic opportunities that have changed their lives.

They argue that short-term rental owners who allow disruptive behavior give the majority of owners a bad name.

“It wasn’t until [my wife] started working for a short-term rental company that we’ve been able to start a family,” said Eric Nolan, whose wife supervises cleaners for a rental company. “There aren’t a lot of jobs where she can be a stay-at-home mom.”

Residents who pushed for the ban, meanwhile, have long complained that the vacation homes are disruptive, lowering their quality of life and turning residential neighborhoods into an extension of the Anaheim’s resort district.

“I don’t plan on spending the rest of my life monitoring, documenting and reporting short-term rental violations. We didn’t sign up for that when we bought our houses,” said Steve Ackerman. “It doesn’t matter how many pages of regulations you have – how do you create a community when your neighbors change every three days?”

Opponents also argue that the explosion of rental homes has contributed to a housing shortage by limiting the number of houses available to permanent residents.

Frank Jones, a valet runner at the Disneyland Hotel, said he is forced to live outside the area, and at times must sleep in his car when he can’t make it home.

“I tried to look for a house in Anaheim, but the least expensive place I could find was $1,600 a month, much higher than I can afford,” said Jones.

The debate also drew the attention of resort business interests and labor unions for hotel and resort workers such as UNITE HERE , which argue the short-term rentals take jobs from resort workers.

Yuval Miller, an attorney for Orange County Communities Organized for Responsible Development (OCCORD), said regardless of how short-term rentals are managed, they harm the lives of long-term residents.

“There are two categories of harm at issue here. The first category is overt, offensive harm – noise, mess, strangers talking to your children,” Miller said. “The second is an insidious, structural harm, the absence of long-term residents who join the neighborhood.”

The same argument, however, was made by house cleaners, contractors and other people, including many Anaheim residents, who depend on short-term rental companies for their livelihoods.

“The people that are working for hotels, they’re not losing their jobs, we are,” said a woman who only identified herself as Brenda, whose family works for a short-term rental company.

The city first began regulating short-term rentals in 2014, with the passage of an ordinance that required a $250 annual permit for residential rentals between three and 30 days.

After the passage of that ordinance, the number of rentals doubled from 200 to 400, prompting a backlash from residents and the passage of a moratorium on new permits in September 2015.

At their meeting Wednesday night, council members weighed two ordinances that would decide the future of the city’s short-term rental policy.

The one that passed imposes a complete ban on short-term rentals and give owners a period to phase out their businesses, with the intent of giving them time to recoup any losses.

An attorney for the Anaheim Rental Alliance, a group representing short term rental owners, argued that the city owes short-term rental operators what’s called an amortization period to recoup their losses, based on their legal right to be compensated for funds they invested into a property under a city permit. The alliance pushed for a phase-out period between ten and fifteen years.

“The city owes the same legal duty to STR owners as it owes to anyone else who receives a permit and vested a reliance on that permit,” said attorney Jane Usher, who called the 18-month period ultimately approved by the council “burdensome and oppressive.”

The other ordinance would have maintained the moratorium on new short-term rental permits and added a number of regulations for operators, including quiet hours, limits on occupancy, increased fines, a process for revoking permits, and mandatory fire safety renovations.

That ordinance passed unanimously, which means that, in addition to the permanent ban, current short-term rental owners will need to implement the regulations during the 18 month period before the ban takes full effect. No new permits will be issued by the city.

Kring called many of the regulations “draconian,” including requirements to install fire sprinklers in all rental homes and prohibitions on guests parking on the street.

“You have people who are vindictive and go around taking pictures of every little minor violation and then they say the city is not following the law,” Kring said. “Why can’t their guests park in front of their house – we all park in front of our houses. I think that’s very cumbersome.”

Kring also pushed back at arguments that short-term rentals have taken jobs from hotel workers.

“These are entrepreneurs that have wonderful businesses. A lot of them are saving for their kids’ college,” said Kring. “The hotels in Anaheim are at 80 to 90 percent occupancy.”

Wednesday’s vote did not address home-sharing for residents who want to rent rooms in their home to visitors. That issue will be addressed separately at a meeting in August.

“I think what we’re doing tonight is going to come back to haunt us. This meeting is very sad for me,” said Kring.

After the meeting, many short-term rental owners were stunned, crying outside the council chambers.

For the residents who supported the ban, including Latino activists with OCCORD and the hotel workers’ union, it was a hard-fought victory for their neighborhoods.

“We are finally reaping the benefits of district elections. The changes we made in this city will last for generations,” said Ada Briceno, chair of OCCORD’s Board of Directors, and secretary-treasurer for UNITE HERE Local 11.

Some of those activists spoke of unseating Kring in the next election.

“It’s our job to be vigilant,” Briceno said to protestors after the vote. “Because the other side will push back, twice as hard.”

Correction: A previous version of this article mistakenly stated the ordinance to regulate short-term rentals was overridden by the ban. The regulations will apply to short-term rental owners during the 18-month period before the full ban takes effect. The article has also been updated to clarify the City Council vote.

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

  • Susie
  • Susie

    If Anaheim property owners or short term rentals decides to continue to rent short term after August 11 2016, they face steep fines anyway and will lose their permits right away anyway if they don’t meet the many new strict guideline requirements by August 11. They will be sending city inspectors out to pop in audit “check up” on properties from August 11 on to see if the properties that continue to operate are in compliance with all the new requirements to stay in business during the phase out 18 month period. Some of these new code requirements that must be installed and in place inside the short term rental homes by August 11 include:
    Property must have installed an extensive indoor fire sprinkler systems throughout the interior of the home & in the bedrooms for safely to meet the fire dept codes.
    Property must have installed exit doors in each of the bedrooms for emergency exits, to name a few plus many more costly upgrades. If these aren’t in place upon inspections, the owners will get massive fines and lose their permit licenses anyway for not following the laws of these new requirements to be operating as a rental during the next 18 months.
    Who would want to incur all these costs to install indoor plumbing pipes sprinkler systems throughout the attics/ceilings, and tear down walls, framing, stucco, to reframe the house in order to install new doors in each bedroom, and many more expensive retrofit major construction upgrades just to get an extra 1-18 months of rentals? Not us. Even if someone does decide to incur all these costs to risk staying open for 18 more months, they have to pay for costly city permits and pass inspections by the city to make sure they are meeting all the strict building codes as well, a whole other set of codes and requirements. It’s just not worth it. If they come out and all this isn’t in place to their standards, they revoke the permit anyway.

  • Susie

    ort term after August 11 2016, they face steep fines anyway and will lose their permits right away anyway if they don’t meet the many new strict guideline requirements by August 11. They will be sending city inspectors out to pop in audit “check up” on properties from August 11 on to see if the properties that continue to operate are in compliance with all the new requirements to stay in business during the phase out 18 month period. Some of these new code requirements that must be installed and in place inside the short term rental homes by August 11 include:
    Property must have installed an extensive indoor fire sprinkler systems throughout the interior of the home & in the bedrooms for safely to meet the fire dept codes.
    Property must have installed exit doors in each of the bedrooms for emergency exits, to name a few plus many more costly upgrades. If these aren’t in place upon inspections, the owners will get massive fines and lose their permit licenses anyway for not following the laws of these new requirements to be operating as a rental during the next 18 months.
    Who would want to incur all these costs to install indoor plumbing pipes sprinkler systems throughout the attics/ceilings, and tear down walls, framing, stucco, to reframe the house in order to install new doors in each bedroom, and many more expensive retrofit major construction upgrades just to get an extra 1-18 months of rentals? Not us. Even if someone does decide to incur all these costs to risk staying open for 18 more months, they have to pay for costly city permits and pass inspections by the city to make sure they are meeting all the strict building codes as well, a whole other set of codes and requirements. It’s just not worth it. If they come out and all this isn’t in place to their standards, they revoke the permit anyway.

  • David Zenger

    How funny. A bunch of people want to be paid off, ahem, amortized, for costs incurred mostly when their “investments” were ILLEGAL.

    Oh, my, a brand new “property right” has been discovered in a terrible mistake concocted by the city government.

  • Jacki Livingston

    Hmmm, now I see. The union thugs are involved. Now it makes sense. Families need to stop spending their money in Anaheim, especially Disneyland. Overpriced, low value, bad food and worse hotels…families need to go elsewhere. Clearly, they don’t want our dollars, anymore.

  • kburgoyne

    The solution to all of this turmoil over AirBNB, Uber, Lyft, etc, is to really enforce the commercial codes.
    Residential areas are not zoned for commercial activity for a very good reason, and that should be enforced — PERIOD. People who want to drive for Uber should be commercially licensed because they are engage in a commercial activity — PERIOD.

    This approach does not discriminate against any given service, it simply places all the services on a level playing field. I’m fine with Uber so long as it doesn’t make its money by trying to sidestep commercial licensing requirements. Uber, taxis, etc, should all be required to meet the same commercial requirements. Once that’s true, if Uber gives taxis a hard time then it simply means taxis need to step up their game. Some of the taxis have, in fact, been stepping up their game with smartphone apps, etc.

    Likewise AirBNB cannot be allowed to make its money sidestepping commercial room rental requirements. As for AirBNB in apartment complexes in commercially zoned areas which could just as easily permit hotels, well… that’s a level playing field. After all, if the zoning permits hotels then the area in which a person lives does in fact permit hotels.

    Whether a given apartment complex is mixed-use should probably best be handled by there being a requirement that potential renters be told before renting that short-term “hotel style” rentals are permitted in the complex. If the renters don’t like it, and the zoning permits hotels, then the renters should seek an apartment elsewhere.

    If it produces decreased demand for the apartments then the owner will be faced with deciding if the short term rentals offset the decreased revenue from long term rentals. As for somebody renting an apartment to then turn around and re-rent it on AirBNB, that’s primarily between the apartment complex owner and the renter and something to be handled by the rental agreement — provided the apartment is in a zone permitting hotels.

    Of course I understand this does lead to a potential decrease in available apartment space.

  • kburgoyne

    I envision this as being a rather amusing coalition between residents and the resort hotel owners. I rather doubt the city council would have listened so quickly to the residents, but I suspect they’ve been assured a pat on the back (and/or wallet) from the resort hotel owners.

    Not sure if Disney would have bothered to weigh-in directly. They probably don’t see AirBNB as a significant threat to their hotels. Somebody is going to pay the price to stay at one of the Disney hotels primarily because it is a Disney themed hotel, otherwise they’d be staying at one of the surrounding hotels.

    DLR is not like WDW. There is “some” convenience to staying at a DLR hotel, but the DLR parks being immediately adjacent to the outlying hotels reduces the convenience difference. With WDW being its own huge property, there is somewhat more convenience benefit to staying at a Disney hotel in WDW.

    Thus WDW has low-end priced hotels along with mid-range and high-end hotels. DLR doesn’t bother with low-end priced hotels because its not worth it to Disney to waste the land on a low-end hotel. People who want a low price can easily find rooms at nearby hotels. Disney’s better off reserving its far more costly per acre DLR land for higher priced hotels and other uses.

  • Paul Lucas

    cheers to the residents of Anaheim.